Texas Lien Notices

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The Texas mechanics lien and construction notice laws are unnecessarily complicated, as we’ve discussed in a number of previous articles, including: Are Texas Lien Deadlines The Most Complicated In The Nation? Part of the problem is the statutes’ actual wording, which reads like a riddle, but another part of the problem is just the volume of requirements and nuances related to lien notices. This article aims to address one [seemingly] simple component of a Texas notice: the signature.

Must a signature appear on a Texas lien notice, or not?

Introduction To Texas Lien Notices

Let’s start with a very pithy introduction to Texas lien notices. Unlike most states that require a single preliminary notice at the start of a construction project, Texas law sets forth a whole buffet of construction lien notices that are sometimes voluntary, sometimes mandatory, and sometimes a mixture of both.

Start of Project Notices

The first type of construction lien notice in Texas is what I’d characterize as the “Start of Project Notices.”  These look and act most like traditional preliminary notices elsewhere in the country in that: (i) They are sent at the start of a project; and (ii) They are only sent once.

Texas law complicates even these “simple” traditional notices, since reference to the notices is sprinkled throughout the entire statute. However, here is a breakdown of the ones you need to know about:

  • Notice of Contractual Retainage (§53.057)
  • Notice of Specially Fabricated Materials (§53.058)
  • Request for Termination (§53.107)
  • Request for Surety information (§53.159)

You should send some or all of these notices at the beginning of a project. Those who use levelset  actually get all of these sent into one combined Texas Preliminary Notice.

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Monthly Notices As You Are Not Paid

The most confusing Texas lien notices are the monthly notices, which, depending on the person, is referred to as “2nd Month Notice,” “Third Month Notice,” “Fund Trapping Notice,” “Notice of Intent,” “Unpaid Balance Notices,” Etc. Etc.  I’ve heard it referred to as a bunch of different things.

Depending on your tier, you will have either 1 single notice or 2 separate notices you’ll need to send for this category of monthly notices. Here are the rules you need to know:

  1. Subs and suppliers who contract with the prime contractor only need to send 1 notice
  2. Those who do not contract with the prime contractor must send 2 notices
  3. Notices must only be sent if you are not paid after a certain amount of time

Texas requires potential claimants to deliver a “monthly notice” for every month that they are not paid.  This is too complicated to fully discuss in this introduction, but a very good overview can be acquired by reviewing this Texas Construction Lien Notice Chart.

Texas Notice Statutes Are Silent On Whether A Signature Is Required

Now that you have a little bit of background about Texas notices, and you are readying your company to send one or more of these notices, you may wonder what must actually be contained on the notices?  And more specifically for the purposes of this article, whether you or someone from your company needs to sign the notice?

Interesting, for as much as the Texas statutes do say, they do not say anything about whether all of these various notices must be signed.  Interesting, for as much as the Texas statutes do say, they do not say anything about whether all of these various notices must be signed.  The statutes for Notice of Contractual Retainage (§53.057), Notice of Specially Fabricated Materials (§53.058), Request for Termination (§53.107), Request for Surety information (§53.159), and the Monthly Notices (§53.056) all set forth what data must be contained within a specific notice, but none of them remark about whether the notice should or should not be signed.

Other Texas Lien Documents Do Specifically Require A Signature

There are other provisions within the Texas Mechanics Lien laws that does reference the need for a claimant’s signature.  Signatures are explicitly required when filing a mechanics lien(§53-054), discharging a mechanics lien (§53-157), or executing a lien waiver (§53-281 et seq).

For example, §53-054, “Contents of Affidavit” states specifically that an affidavit “must be signed by the person claiming the lien or another person on the claimant’s behalf.”

Courts Are Silent On The Topic

A very compelling argument could be made that since the Texas laws specifically require signatures for some documents (i.e. liens, discharges, waivers, etc.), the silence about signatures with respect to lien notices is an indication that the legislature did not intend to require signatures on these documents. Not only is this argument compelling, but I believe it is correct.

Notwithstanding this, my review of case law on Texas notices doesn’t reveal any judicial treatment of this topic. Courts, therefore, have yet to be presented with a challenge to a lien notice because of a missing signature. This is probably for two reasons.

First, it would be a pretty poor argument.  Second, the custom in the industry within Texas is to just sign the form, and therefore, very few opportunities exist to bring the challenge.  What would happen if the circumstances were right and a challenge was brought to the court…there’s no telling.

Some States Do Have Notices Without Signatures

Although it is difficult to compare Texas lien notice requirements to any other state because of the unique Texas statutes, states treat the signature needs of a preliminary notice document quite differently.

Washington is an example of a state that definitely does not require a signature on its standard Notice to Owner form.  This is obvious because the form is proscribed specifically within the statute (RCW § 60.04.031), and lacks any place or contemplating for a signature.

The opposite is true in a state like Ohio, and many, many others.  Ohio’s Notice of Furnishing Statute (R.C. §1311.05), like Washington, sets forth the specific notice form to be used within the statute. Unlike Washington, however, there is a place for a signature, meaning that the Ohio notice must be signed. This is in line with most other states who also require their preliminary notices contain a signature.

What To Do?

Look at the landscape here.  Most states require that preliminary notices be signed, but some states specifically proscribe forms that do not include a signature. It’s conceivable, therefore, that a state could have lien notices without a signature requirement.

Including a signature on the notice document is easy, and it’s worth signing your notices absent an indication that signatures are absolutely not required.
Texas’ law sets forth some instances when signatures are specifically required, but is silent about whether a signature is or is not needed within its myriad of lien notice forms. While this is strongly suggestive that a signature is not needed on these documents, it is not a concrete answer because (i) Interpreting the silence as a lack of requirement is an interpretation; and (ii) The courts have yet to rule on this particular topic.

You could probably get away with sending Texas notices without a signature, and in the unlikely event that the issue was litigated, you’d probably prevail on the signature point. The risk, however, seems unbalanced to the reward. Including a signature on the notice document is easy, and it’s worth signing your notices absent an indication that signatures are absolutely not required.

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Texas Lien Notices: Must They Be Signed?
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Texas Lien Notices: Must They Be Signed?
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Texas lien notices are complicated, as is the entire lien scheme in Texas. One wonder is whether Texas notices must be signed. This article explores.
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Levelset
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